Table of Contents
Message from the President
Toward the Mobility Society of the Future
Initiatives for Sustainable Growth
Corporate Data
Toward the Mobility Society of the Future Management Team Connectivity Marketing Electrification Ever-better Cars GAZOO Racing Automated Driving Partner Robots Business Innovation Developing People Message from the CFO Capital Policy
Toyota’s Business Innovation:
Organizational Framework, the Toyota Group, External Collaboration, and TPS and Cost Reduction
developing Toyota’s existing businesses, we must boldly
move forward to transform into a mobility company.
Reflecting the Toyota Group’s determination to
take on this era of profound transformation, in 2018
Toyota moved up the timing for changing its execu-
tive lineup from April to January. To transform the
roles and awareness of executives, we revised the
position of executives within the Company and, from
the perspective of putting the right people in the right
places, appointed people with high levels of exper-
tise, regardless of time with the company or age.
Going forward, all executives and employees will
continue to take on new challenges, acting with the
constant awareness that there is always a better way.
lines. At the same time, the global automotive market
is expected to see continued expansion, chiefly in
emerging nations and regions, such as Africa. In
order to bring together the strengths of the whole
Group and effectively use resources in this era of pro-
found transformation, we are applying a “home and
away” perspective as we rebuild the business struc-
ture of the Toyota Group as a whole.
customer requirements. Underlying these efforts is
the Toyota Production System (TPS). The TPS is
based on the two concepts of Jidoka (automation
with a human touch) and Just-in-Time. Jidoka entails
that when a problem occurs, the equipment stops
immediately, preventing the production of defective
products. Just-in-Time means that, in each process,
only what is needed, when it is needed, and in the
amount needed is produced or transported. The
complete elimination of waste, achieved by applying
these two pillars, improves productivity, ultimately
reducing costs.
In this era of profound transformation for the auto-
motive industry, we must anticipate customer needs
to provide more personalized mobility services more
directly and in real time. In other words, we must cre-
ate a world in which the services that are needed are
provided when needed and as needed. This is pre-
cisely the essence of Just-in-Time.
The TPS and its approach to cost reduction are
wellsprings of competitive strength and unique
advantages for Toyota. Thoroughly honing these
strengths will be essential to Toyota’s future survival.
In January 2018, we established the TPS Group
with the aims of redoubling TPS efforts outside of
manufacturing divisions and enhancing competitive
strength and productivity. In June, we placed our
logistics division within the TPS Group. We are accel-
erating Company-wide initiatives that position the
TPS as the core of corporate management.
There Is Always a Better Way: Revising
Our Organizations and Businesses
To further advance the goals of making ever-better
cars and human resource development, Toyota has
been revising its organizational framework and exec-
utive lineup. In terms of organizational framework,
Toyota introduced region-based management in
“Home” refers to operations and regions in which
we can add value ourselves through Genchi
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011, followed by a business unit system in 2013. To
place greater priority on our Customer First policy
and facilitate quick judgment, quick decisions and
quick action based on Genchi Genbutsu (onsite,
hands-on experience), in April 2016 we established
product-based in-house companies, considerably
changing the orientation of our business structure
from a focus on functions to a focus on products. In
September 2017, we established a new company,
EV C.A. Spirit, to advance the development of basic
structural technologies for electric vehicles via an
approach that is open to the participation of other
companies. Through these and other measures, we
have proactively advanced business innovation.
Toyota has also been working to appoint diverse
human resources to the right positions in its execu-
tive lineup. Transcending practices of the past, efforts
have included appointing our first non-Japanese
executive vice president in 2015 and first executive
vice president whose career began on the factory
floor in 2017.
Genbutsu (onsite, hands-on experience) and in which
we have competitive advantages over our rivals.
“Away,” meanwhile, refers to operations and regions
in which we will work with other companies that have
more advantages than we do.
Rather than advancing alone, Toyota is bringing
together the full strength of the Group. We aim to identify
the strengths that make up each company’s “home” turf
to increase productivity and thereby reinforce the com-
petitive strength of the Group as a whole.
Our approach to alliances with partners outside the
Group is the same. Rather than seeking equity-based
business scale expansion, we aim to realize a better
mobility society through speedy, open collaboration
with partners who share our aspirations.
* Toyota Group (16 companies): A corporate group centered on Toyota
Motor Corporation and the company from which it emerged, Toyota
Industries Corporation. The Group comprises Toyota Industries
Corporation, Aichi Steel Corporation, JTEKT Corporation, Toyota
Auto Body Co., Ltd., Toyota Tsusho Corporation, Aisin Seiki Co.,
Ltd., DENSO Corporation, Toyota Boshoku Corporation, Towa Real
Estate Co., Ltd., Toyota Central R&D Labs., Inc., Toyota Motor East
Japan, Inc., Toyoda Gosei Co., Ltd., Hino Motors, Ltd., Daihatsu
Motor Co., Ltd., Toyota Housing Corporation, and Toyota Motor
Kyushu, Inc.
Speed and Openness, Home and Away
Returning to Our Fundamentals to Blaze
the Trail Forward
With the advance of electrification, automation, con-
nectivity, and other technologies, the automotive
industry has now entered a new phase of coopera-
tion and competition that is transcending industry
Today, the global Toyota Group* sells more than 10
million new vehicles per year. While maintaining and
Toyota strives to efficiently and quickly produce vehi-
cles of sound quality, one at a time, that fully satisfy
Toyota Production System
Jidoka
Just-in-Time
Major Actions to Strengthen the Toyota Group from 2016 to Present
(
automation with a
human touch)
Quality must be built in
during the manufacturing
process
Making or transporting
only what is needed,
when it is needed, and in
the amount needed
Toyota and DENSO reach basic agreement to consolidate their electronic component operations at DENSO
Toyota and Toyota Tsusho reach basic agreement to consider the transfer of all Toyota’s sales and marketing operations in
African markets to Toyota Tsusho
June 2018
Toyota Autoparts Philippines, Inc. is made a subsidiary of Aisin to strengthen its competitiveness in the manual transmission
business
May 2018
Toyota Research Institute-Advanced Development, funded by Toyota, Aisin, and DENSO, is established to accelerate
the advanced development of automated driving technologies
March 2018
September 2017
Cost reduction through the complete
elimination of waste
EV C.A. Spirit Corporation, funded by Mazda, DENSO, and Toyota, is established to jointly develop technologies for electric vehicles
*
Subaru, Suzuki, Daihatsu and Hino joined the project effective December 28, 2017
Bringing the Toyota Production System to
Development, p. 16
More details
More details
December 2016 Toyota and Daihatsu launch Emerging-market Compact Car Company
January 2016
Toyota makes Daihatsu a wholly owned subsidiary to strengthen small car operations
Applying the TPS and Accelerating Business
Innovation, p. 37
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TOYOTA Annual Report 2018